Local Digital Ads Take Center Stage for SMBs

More SMBs pay attention to mobile

Small and medium-sized businesses (SMBs) are showing increased enthusiasm for local advertising, with its ability to target a specific consumer, in the region or around the corner. Digital advertising offers among the newest and most effective local targeting, and SMBs plan to invest heavily in the channel in 2013, resulting in a dramatic increase in local ad dollar investment.

According to a report from Borrell Associates, “2013 Local Advertising Outlook: Get Ready for the Rebound,” US local digital advertising will reach $24.5 billion in 2013, to take a 25% share of total local ad budgets. That’s an increase of 31% over 2012, and nearly four times Borrell Associates’ prediction for overall growth in ad spending. It’s also well above the 17.6% rise expected for national digital advertising.

Local digital budgets will go primarily to targeted display ads and paid search, which together will account for 60% of total local digital advertising. Social media was not broken out in the study, but included in targeted display and search spending.

Social is an especially important local digital format, offering information on a user’s locale and interests, and showcasing ads for nearby businesses “liked” by friend connections. Among US SMBs, Facebook was the No. 1 online format where these businesses reported planning to place ads, with nearly three out of 10 expecting to do so.

Mobile also has a significant role to play in local SMBs’ efforts, offering real-time access to users out running errands or looking for a nearby restaurant. Three-quarters of SMBs reported familiarity with the channel in 2012, up from only 40% in 2011. Coupons, text messages and creating mobile-optimized sites were among the primary tactics SMBs reported using on mobile.

There also appears to be opportunity for mobile vendors to reach out to more SMBs. More than four out of 10 respondents reported to Borrell Associates that they had never been pitched by a mobile vendor about mobile advertising.

Of those who have used mobile advertising, a solid 83% said they were at least somewhat likely to use it again in 2013.

Broken out from online spending, 25% of SMBs planned to increase mobile budgets this year.